Pulmonary surfactant is a complex mixture of lipids and proteins that prevents collapse of the alveoli and distal airways at low lung volumes. In the lungs surfactant exists within two major compartments referred to, respectively, as the intracellular and extracellular pools. The most potent inducer of the pulmonary surfactant system reported appears to be silica dust. The objectives of this work are to elucidate mechanisms through which silica stimulates surfactant production in the lungs. Extracellular surfactant from the lungs of rats was obtained by bronchoalveolar lavage. Intracellular surfactant was isolated from lavaged lungs by density gradient centrifugation of the homogenized tissue. Intra- and extracellular pools of surfactant phospholipids were 0.69+0.27 mg/pair of lungs and 1.21 plus or minus 0.09 mg/pair of lungs, respectively. Intratracheal injection of silica produced marked changes in both the intracellular and extracellular pools of surfactant, an effect that was both time- and dose-related. Twenty-eight days following a single 50 mg dose of silica, the intra- and extracellular pools of surfactant were increased 80-fold and 29-fold, respectively. Expansion of the surfactant pools could be achieved through alterations in the dynamic equilibrium that under normal circumstances exists between the intracellular and extracellular compartments. This hypothesis was examined in vivo using 3H-palmitate as a phospholipid precursor. Biosynthesis of surfactant phospholipids was increased approximately 10-fold but transfer to the extracellular pool increased only 4-fold thus accounting for the expansion of the intracellular pool of surfactant. Although secretion increased 4-fold the turnover of phospholipids in the extra-cellular pool increased only 2-fold thereby leading to expansion of the extracellular pool. These studies demonstrate that silica causes a large increase in the biosynthesis of surfactant phospholipids and that the expansion of the intracellular and extracellular pools is due to imbalances in the dynamic equilibrium between the two compartments.